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IN THE HIGH COURT OF CALCUTTA
Ajoy Kumar Mukherjee, J.
Pawan Kumar Sethia And Others - Appellant
Versus
State Of West Bengal And Another - Respondent
C.R.R. 628 of 2020
Decided On : 26-07-2022
Criminal Breach of Trust - Dispute over Remuneration and Loan - Indian Penal Code, Sections 406/420/471/468/504/506(ii)/120B
Fact of the Case:
The case involves a dispute over non-payment of remuneration and loan amount between the petitioners and the opposite party. The opposite party alleged that the petitioners induced him to manage construction work and failed to pay remuneration and loan amount as agreed.
Finding of the Court:
The court found that the dispute was purely civil in nature and did not disclose any cognizable offence against the accused persons. It observed that the allegations did not establish criminal breach of trust or cheating as there was a serious dispute between the parties over the terms of the agreement.
Issues: The main issues revolved around the non-payment of remuneration and loan amount, as well as the allegations of cheating and breach of trust.
Ratio Decidendi: The court emphasized that a mere breach of promises related to payment or repayment does not ipso facto constitute criminal breach of trust without clear evidence of entrustment. It also highlighted that criminal proceedings should not be used as a shortcut for civil disputes.
Final Decision: The court quashed the criminal proceeding under Sections 406/420/471/468/504/506(ii)/120B of the Indian Penal Code, finding that the dispute was purely civil in nature and did not disclose any cognizable offence against the accused persons.
JUDGMENT
Ajoy Kumar Mukherjee, J. - Judgment referred on behalf of petitioners
a) Alpic Finance Limited Vs. P. Sadasivan and another (2001) 3 SCC 513.
b) S.K. Alagh Vs. State of U.P. & others (2008) 5 SCC 662.
c) Sushil Sethi and another Vs. State of Arunachal Pradesh & others (2020) 3 SCC 240.
d) V.Y. Jose & another Vs. State of Gujarat & another ( 2009) 3SCC 78.
e) Sharad Kumar Sanghi Vs. Sangita Rane (2015) 12 SCC 781.
f) Pepsi Food Ltd. & another Vs. Special Judicial Magistrate & others (1998) 5SCC 749.
g) Masand Saiyed Vs. State of Gujarat & Others (2008) 5 SCC 668.
h) G. Sagar Suri & another Vs. State of U.P. & others (2000) 2 SCC 636.
i) M.S. Banga Vs. State of W.B. & another (2004) SCC OnLine Cal 443.
j) Satish Chandra Ratanlal Shah Vs. State of Gujarat & another (2019) 9 SCC 148.
Judgments referred on behalf of opposite Party No. 2
a) Ramveer Upadhyay & another Vs. State of U.P. & another (special Leave Petition (Cri) No. 2953 of 2022.
b) Hamida Vs. Rashid (appeal (cri) 632 of 2007).
c) Jagmohan Singh Vs. Vimlesh Kumar & others (Criminal Appeal No. 741/2022 arising out of SLP (cri) No. 9339 of 2021).
d) Md. Allauddin Khan Vs. The State of Bihar & others.(criminal Appeal No. 675/2019 arising out of SLP (Cri) No. 1151 of 2018).
1. The present revisional application has been preferred for quashing of the proceeding including charge-sheet no. 115 of 2018 dated 21.7.2018 in connection with Beniapukur Police Station RI-III/13 dated 1.4.2013 under Sections 406/420/471/468/504/506(ii)/120B of the Indian Penal Code corresponding to GR case no. 1123 of 2013 pending before the court of learned Additional Chief Judicial Magistrate, Sealdah.
2. The allegations levelled by opposite party no. 2 namely, Narayan Prasad Saraff against the present petitioners in the written complain dated 04.03.2013 may be summarized as follows:-
(I) the petitioners induced the opposite party no. 2 to manage look after the building construction work at their firm at Malda on monthly remuneration of Rs. 25 thousand per month and on being induced, the opposite party no. 2 agreed to manage and look after the said work and for that purpose, on 6.1.2000 the petitioners executed a power of attorney in his favour in respect of said construction work at Malda and further they executed another registered power of attorney on 19.7.2001.
(II) In the early part of the year 2003 the petitioners requested him to give the financial assistance of Rs. 4 lakhs and on goof faith he gave a sum of Rs. 4 lakhs and they undertook that they will pay said amont of Rs. 4 lakhs along with substantial interest to opposite party no. 2 within a year.
(III) As per power of attorney dated 6.1.2000 followed by registered power of attorney dated 19.1.2001, the opposite party no. 2 looked after and manage, control and performed the works in respect of said Malda property but the petitioner did not pay a single rupee to him as remuneration.
(IV) Sometime in middle part of 2004, when opposite party no. 2 demanded the return of loan amount of Rs. 4 lakhs along with interest as well as remuneration of Rs. 25 thousand per month since January 2001, the petitioners only to pacify him made a settlement whereby agreed and undertook to pay the loan amount of Rs. 4 lakhs along with substantial interest thereon and monthly remuneration of Rs. 25 thousand per month since January, 2001 till March, 2004 within 31.3.2005 and settlement was held on 27.8.2004.
(V) The petitioners also requested him to continue the work as per power of attorney and considering the relation, the opposite party no. 2 continued the construction work. The petitioners with fraudulent mala fide and dishonest intention of cheating and misappropriation for achieving their wrongful gain, they adopted dilatory tactics. Due to prolonged wait for almost three years and sensing something wrong, firstly on 2.1.2008, the opposite party went to their office and demanded Rs. 4 lakhs along with Rs. 25 thousand per month remuneration since January 2000 to January
Criminal proceedings should not be used as a shortcut for civil disputes, and a mere breach of promises related to payment or repayment does not ipso facto constitute criminal breach of trust without....
A breach of contract does not constitute cheating unless fraudulent intent is proven at the outset of the agreement, as established in relevant legal precedents.
The court affirmed that criminal proceedings cannot be used as leverage in civil disputes, emphasizing the need for proof of dishonest intent and necessary ingredients for offences claimed. Lack of v....
The court established that allegations of non-payment in a business context do not automatically constitute criminal offences without evidence of fraudulent intent.
The court affirmed that a party only involved in a civil contract cannot face criminal liability unless it directly transacted or misappropriated funds, supporting the need for a clear distinction be....
A breach of contract does not give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown at the time of the transaction.
The court established that criminal proceedings cannot be initiated for civil disputes, and the absence of fraudulent intent negates charges of cheating and criminal breach of trust.
Non-payment of dues does not constitute criminal cheating or breach of trust unless fraudulent intent is established from the inception of the transaction.
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